The Claimants are senior executives of QNB Finansbank AS (‘Finansbank’), which is apparently one of the largest banks in Turkey. The First Claimant, Dr Aras, is its Chairman and one of its co-founders. The Second Claimant, Mr Sahinbas, is its Vice Chairman and a former Chief Executive Officer. The Third Claimant, Mr Guzeloglu, is its current Chief Executive Officer.

This case concerns the Claimants’ entitlement to a fee (the ‘Fee’) which they contend became payable by the Defendant, National Bank of Greece SA (‘NBG’), the second largest bank in Greece by market capitalisation, under three agreements, each described as an “Incentive Fee Agreement”, which they separately (but on materially identical terms) entered into with NBG on 30 December 2011 (the ‘IFAs’).

The purpose of the IFAs was described in Clause 1 (“BACKGROUND”) as being:

Under the IFAs, as explained in more detail later, it was agreed that the Fee would potentially become payable in the event of the disposal by NBG of more than 5% of its shares in Finansbank (defined as an “Exit Event”).

The present dispute comes about by reason of the fact that, on 21 December 2015, NBG entered into an agreement, described as a “Share Sale and Purchase Agreement” (the ‘SSPA’), under which it agreed to sell its shares in Finansbank to Qatar National Bank SAQ (‘QNB’). Upon completion of that sale, on 15 June 2016, QNB paid €2.711 billion to NBG for its shares in Finansbank and the shares were transferred to QNB. Under the SSPA, NBG also agreed separately to sell to QNB the subordinated debt of US$910 million which was due from Finansbank to NBG (the ‘Subordinated Debt’), at a price equal to its par value and accrued but unpaid interest.

It is common ground that, as a result of the sale of the shares to QNB (if not also the sale of the Subordinated Debt and certain other shares in a related company, Finans Finansal Kiralama AS (‘Finans Leasing’)), there has been an “Exit Event” for the purposes of the IFAs. There is a very real controversy, however, as to when precisely the “Exit Event” took place, specifically whether it was on the date when the SSPA was executed (21 December 2015) or on the date when NBG actually disposed of its shares in Finansbank to QNB pursuant to the SSPA (15 June 2016). This is one of the issues which the Court must resolve: the Claimants contend for the former whilst NBG contends for the latter.

That issue turns on the proper construction of the IFAs, including certain wording contained in the Appendix to the IFAs which sets out the formula agreed between the parties to work out what (if any) Fee is payable. So, too, do certain related disputes concerning (a) whether the Subordinated Debt should be taken into account in ascertaining Finansbank’s value in accordance with that formula, (b) whether consideration received by NBG in respect of shares in Finans Leasing should similarly be taken into account for that purpose and (c) what is the appropriate exchange rate to take in view of the agreed formula contained in the Appendix.

These are all matters which I shall come on to address but, as regards (b), I should explain straightaway that, as at the date of the SSPA, besides owning almost the entirety of the shares in Finansbank, NBG also held directly a 29.87% shareholding in Finans Leasing. Although those shares did not form part of the “Shares” which were to be sold to QNB under the SSPA, in the negotiation of the sale it had nonetheless been anticipated that those shares would be transferred to Finansbank itself and that QNB would pay NBG for those shares. In the event, however, Finansbank itself paid NBG €38,886,563.04 for its shares in Finans Leasing, so reducing the price payable by QNB for NBG’s shares in Finansbank to €2,711,112,659.23 rather than the €2.75 billion identified in the SSPA. For this reason, it was NBG’s position that, in operating the formula contained in the Appendix to the IFAs, the Finans Leasing element should not be included. Mr Valentin QC on behalf of the Claimants did not agree, submitting that the fact that between execution of the SSPA and completion Finansbank acquired NBG’s 29.87% shareholding in Finans Leasing meant that those shares, together with Finansbank’s own 51% stake in Finans Leasing, also formed part of the assets of Finansbank which QNB acquired from NBG on completion, and so the IFAs should be treated as applying to the Finans Leasing shares also.

As to (c) (currency exchange date), this issue arises because, whereas Finansbank’s “Equity Book Value” (as referred to in the Appendix to the IFAs) was denominated in Turkish Lira, NBG’s accounts were denominated in Euros which meant that the sum payable by QNB to NBG in respect of the Shares in Finansbank was payable (and paid) in Euros. In addition, the sum payable by QNB to NBG in respect of the Subordinated Debt was payable (and paid) in US Dollars. Mr Valentin’s submission was that the correct date for performing the relevant currency exchange is the date of the relevant “Equity Book Value” (30 September 2015), rather than the date of the “Exit Event”. Mr Parker on behalf of NBG, on the other hand, argued that the correct equivalent date is the date of the “Exit Event”, whenever that was (either 15 June 2016 or on 21 December 2015), and not any earlier date.

These are all disputes which need to be resolved. Suffice it to say that, although the Claimants say that they are each entitled to a substantial Fee (over €17 million in the case of Dr Aras and over €5 million in the cases of Mr Sahinbas and Mr Guzeloglu), NBG denies that anything is payable at all.

As I have already mentioned, this is a case which, at least in the first instance, turns on the proper construction of the IFAs. The Claimants, however, advance an alternative case that, if they are wrong on the construction issues which arise, then, nonetheless they are entitled to succeed with their claims because NBG is estopped from contending that a Fee is not payable in the light of how NBG conducted itself in advance of the sale to QNB.

I shall address both these cases (the construction case and the estoppel case) in what follows. First, however, it is important that I should set out some background in order that the issues can be seen in their proper context. That background is very largely, if not quite exclusively, common ground. As a result, I can essentially take it from the helpful summary in Mr Valentin’s written closing submissions. However, the extent to which it is all admissible in relation to the construction-related issues which the Court has to determine is not entirely free from controversy.

I start with the Claimants themselves, noting as I do so that Dr Aras and Mr Guzeloglu each gave evidence at trial and that they did so in a straightforward and constructive fashion. So, too, I should observe in the interests of fairness, did Mr Mylonas, Head of the Office of the Chief Executive Officer, Mr Apostolos Tamvakakis, at the time that the IFAs were entered into and now himself NBG’s Deputy Chief Executive Officer.

The Claimants have worked together at Finansbank as a team for the last 15 years. They continue to do so to this day: Dr Aras as the Chairman, having co-founded Finansbank in 1987; Mr Sahinbas as the Vice Chairman, having joined Finansbank on graduation in 1990 and, apart from a short spell away in 1997/98, having worked with the bank in various positions in Istanbul and abroad ever since, being appointed Chief Executive Officer and joining the Board in 2003; and Mr Guzeloglu as Finansbank’s current Chief Executive Officer, having joined Finansbank in 2004 and become a Board member in 2010.

As for Finansbank itself, Dr Aras’s evidence was that as at the end of 2017, the Finansbank Group had consolidated assets of approximately US$35 billion under management and approximately US$3.3 billion of equity, with approximately 550 branches in Turkey and more than 14,000 employees serving 6 million or so active customers.

Turning to the parties’ entry into the IFAs in December 2011, earlier that year Dr Aras was approached by Mr Tamvakakis to discuss NBG’s plans to sell part of its shareholding in Finansbank. As part of that process, Mr Guzeloglu and Dr Aras travelled to London in March 2011, together with Mr Anthimos Thomopoulos, then NBG’s Chief Financial Officer, on a ‘pilot fishing’ roadshow to meet with potential investors. Although well received, investors expressed concern at recent decisions of the Turkish Central Bank to increase the capital reserve requirements for Turkish banks (which would impact adversely on their profitability). In the circumstances, NBG decided to postpone the sale of any part of Finansbank, hoping that it would achieve a better price in the future. As part of this strategy, it is clear (indeed, it is stated, in terms, in the IFAs which came to be entered into) that NBG wished to incentivise the Claimants to use their “best efforts to dispose of NBG’s interest in the Finansbank Group”. So it was that in the second half of 2011 Dr Aras proposed, and Mr Tamvakakis agreed, to enter into the IFAs. This led to a meeting at NBG’s headquarters in Athens on 19 December 2011, attended by Dr Aras, Mr Tamvakakis, Mr Agis Leopoulos (NBG’s General Manager of International Activities), a lawyer from Allen & Overy (acting for NBG) and Mr Can Verdi (a Turkish qualified lawyer and friend of Dr Aras) and, ultimately, to the entry into the IFAs which are the subject of these proceedings, the Claimants also that same day signing new employment contracts with Finansbank extending their employment until 31 December 2014 on substantially the same terms as their existing contracts.

As to what was agreed in the IFAs, taking Dr Aras’s agreement as an example (the only differences between his and Mr Sahinbas’s and Mr Guzeloglu’s being as to the percentages which were agreed and the inclusion of a second sub-paragraph at Clause 3 of Dr Aras’s agreement regarding negotiation of additional agreements in good faith), Clause 1 (“BACKGROUND”) is in the terms which I have previously described. Clause 2 then contains certain definitions, which include the following:

Clause 3 (“AGREEMENT”) is, then, in the following terms:

This is followed by Clause 4 (“CALCULATION AND PAYMENT OF THE FEE”) which provides that the Fee “will be determined in accordance with the provisions set out in the Appendix to this Agreement” (Clause 4.1) and which went on to stipulate that the Fee “payable under this Agreement will … be paid in cash and in two instalments”, the first falling due 30 days after “Completion” and the second instalment “on the first anniversary of Completion” (Clause 4.2(a)).

As for the all-important Appendix, this is headed “CALCULATION OF THE FEE (BY REFERENCE TO PRICE TO BOOK RATIOS)” and is in these terms:

Percentage of Exit Value

Determination of A

As at the date that the IFAs were signed, it is common ground that NBG held 94.81% of the Finansbank shares and, furthermore, that the holder of 5% of the shares had a put option to sell those shares back to Finansbank, which was exercised on 26 September 2014. There is no dispute, either, that by this stage NBG had provided funding to Finansbank represented by US$910 million of subordinated debt.

I come on to deal with events which happened after the parties’ entry into the IFAs. These are relevant because they show how the current dispute has arisen. It is important, however, to acknowledge right away that, consistent with the authorities which I shall come on to consider later, as Mr Parker submitted and as ultimately Mr Valentin was essentially driven to accept, evidence as to what occurred after the date of the IFAs is irrelevant to their construction. In particular, whilst the Court may have regard to what has been termed “commercial common sense”, this is not to be invoked retrospectively or “elevated to an overriding criterion of construction”.

Although Mr Parker urged caution in relation to subsequent events, as I have just mentioned, he did not quibble with Mr Valentin’s description of the background difficulties which NBG, as a Greek bank, was facing in the period leading up to the sale of Finansbank. The difficulties of Greek banks has been well-documented and, as regards NBG in particular, are summarised in the European Commission’s State Aid Decision concerning NBG published on 4 December 2015 (the ‘Decision’).

In summary, as Mr Valentin pointed out based on what is stated in the Decision, whereas the European Central Bank (the ‘ECB’) had confirmed in October 2014 that the four systemic Greek banks (i.e. Alpha Bank, Eurobank, Piraeus Bank and NBG) would not require additional capital, as a result of the severe political uncertainty which was experienced from December 2014 onwards, large deposit outflows from the Greek banks ensued and their liquidity conditions tightened considerably. As a consequence, the Greek banks (again) became largely dependent on Emergency Liquidity Assistance (‘ELA’) from the Central Bank of Greece, with the liquidity crisis experienced in the first half of 2015 leading to the closure of the Greek banks, including NBG, between 29 June 2015 and 20 July 2015. This precipitated a dramatic increase in the Greek banks’ reliance on ELA which, as it was put in the Decision, “skyrocketed from nearly zero to a peak of EUR 88.3 billion at the end of July 2015”. These events, and the introduction of capital controls, also affected the solvency position of the Greek banks, and on 31 October 2015, the Greek Parliament approved legislation which allowed NBG and the other systemic banks to receive support from the Hellenic Financial Stability Fund (the ‘HFSF’).

Two days later, on 2 November 2015, NBG sought authorisation from the HFSF to convoke an EGM to approve a capital increase to cover its capital shortfall, which was between €1.576 billion (on a baseline case) and €4.602 billion (on an adverse case). The next day, 3 November 2015, the HFSF gave its consent.

During November 2015, NBG conducted a Greek Offering and an International Offering, which raised respectively €300 million and €457 million, as described in the Decision (albeit with redactions in the version before the Court at trial) as follows:

the International Offering would be carried out in the context of the overall implementation by the Bank of the capital plan meant to address the capital shortfall revealed by the 2015 CA,

the actions of the capital plan included inter alia the 2015 capital raise and the Liability Management Exercise (‘2015 LME’) launched by the Bank on 2 November 2015 and completed on 11 November 2015 (‘the Private Capital Raising Measures’) and

the part of the adverse scenario shortfall that would remain uncovered by the Private Capital Raising Measures and the intended sale of Finansbank A.S. would be covered through the issuance of CoCos and new shares to the HFSF (provided that the Bank had raised sufficient capital to address the baseline scenario shortfall from the Private Capital Raising Measures and from any burden-sharing measures taken in light of EU State aid rules prior to the granting of State aid).

Subsequently, on 3 December 2015, NBG submitted a request to the HFSF for a capital injection of €2.706 billion, consisting of €676 million in ordinary shares, and €2.029 billion in Contingent Convertible Bonds (‘CoCos’). This was approved on the same date and is described in the Decision as follows:

In conjunction with these events, NBG pursued various measures to restructure its Greek and international operations, in the form of the 2015 Restructuring Plan. As far as Finansbank was concerned, this involved the sale of 100% of stake in Finansbank, as described in the Decision at (66) to (71):

As Mr Valentin put it, the net effect of these measures was that, on 4 December 2015, the European Commission approved aid for NBG, on the basis of the 2015 Restructuring Plan, in the amount of €2.71 billion. This was announced in the European Commission’s Press Release the same day which was entitled “State aid: Commission approves aid for National Bank of Greece on the basis of an amended restructuring plan” and which went on to state as follows in the first paragraph:

Mr Mylonas confirmed in his evidence that, in the circumstances, although NBG anticipated that it would be required to sell its entire stake in Finansbank at an earlier stage in 2015, it only became a formal commitment on 4 December 2015. Furthermore, it was not in dispute that the formal commitment made by NBG (and underwritten by the Greek State) required that the sale of Finansbank was to be signed up, on a binding basis, by the end of December 2015.

It is necessary now to say something about the Claimants’ employment contracts, albeit not very much at this stage since, in truth, this is a matter which is only directly relevant to the Claimants’ (alternative) estoppel by convention case.

The employment contracts were all due to expire on 31 December 2015 (and so, in the event, shortly after the SSPA was entered into between NBG and QNB) but were extended on 30 July 2015, after a period of negotiations which started in the Spring of 2015, and so at a time when NBG had begun preparing the sale of Finansbank, and in which Mr Mylonas acted on NBG’s behalf.

The extensions agreed were to 31 December 2017 in the case of Dr Aras and Mr Sahinbas and to 31 December 2018 in the case of Mr Guzeloglu, and the negotiations were conducted by Mr Mylonas (on behalf of NBG). What is most significant, however, from the perspective of the estoppel by convention case, as will appear, is that it was agreed that the employment contracts, as extended, would no longer contain a “Change of Control” provision. Specifically, and taking Dr Aras’s employment contract by way of example (although the relevant notice period in his contract was more generous than the 8 weeks to 6 months period contained in Mr Sahinbas’s and Mr Guzeloglu’s employment contracts), Clause 14 (“TERMINATION OF AGREEMENT”) contains sub-clause (d) which provides as follows:

It is the Claimants’ case that they were only willing to agree to the “Change of Control” provisions no longer appearing in their respective employment contracts on the basis that, as Dr Aras put it in his witness statement, “there were no circumstances in which NBG would sell the Bank at a price which was below its equity book value”. It is this issue to which I shall have to return.

Coming back to the sale by NBG of its shareholding in Finansbank, during August and September 2015, NBG sent out so-called “Phase 1” process letters to various parties. Taking the example of the letter which was sent to QNB dated 13 August 2015, although the letters were in identical format, this stated, inter alia, as follows:

The letters also referred to the fact that their recipients would be receiving an “Information Pack”. This, at least the version dated September 2015, ran to some 114 pages. As Mr Valentin highlighted in closing: it emphasised that Finansbank was a universal bank, with a proven track record of success since its foundation, and an independent and experienced management team supporting strong growth since NBG’s acquisition in 2006; it identified the key financial performance ratios, up to and including the second quarter of 2015 (the last quarter available as at the date that the Information Memorandum was produced); it highlighted, amongst the five features which made Finansbank “an agile bank offering a compelling investment proposition”, its proven and experienced management team; and it gave details of that team, the most senior members of which were the three Claimants.

Subsequently, on 23 November 2015, QNB made a Binding Offer for the purchase of NBG’s stakes in both Finansbank and Finans Leasing. The relevant letter stated by reference to a Phase II letter which was not in evidence at trial, inter alia, as follows:

It was following receipt of QNB’s Binding Offer that, as previously explained, NBG became formally committed to sell Finansbank by the end of December 2015, pursuant to the 2015 Restructuring Plan submitted to the European Commission, and as underwritten by the Greek State.

The SSPA dated 21 December 2015, which was drafted by Freshfields, NBG’s solicitors, identified at Recitals (E) and (F) that NBG intended both to sell the “Seller Shares” (which included the Finansbank shares) and to assign the Subordinated Debt to QNB, identifying the Purchase Price (Clause 2) as a single amount of €2.75 billion for the “Shares” and providing for the assignment of the Subordinated Debt (Clause 3) at par value plus accrued but unpaid interest up to Closing, in consideration of payment to NBG of the “Subordinated Debt Amount” (defined, as appears below, as being US$910 million, plus interest), pursuant to a Transfer Agreement, a draft of which was included at Schedule 12 to the SSPA. The SSPA also provided for a Net Asset Adjustment (Clause 5) to cater for the possibility that the Actual Net Asset Value of Finansbank was less than its Reported Net Asset Value (defined, again as will appear, by reference to the “Locked Box Accounts”, namely the “quarterly consolidated reviewed accounts of [Finansbank] in respect of the nine month period ended on [30 September 2015] ...”) and contained an undertaking by NBG that since 30 September 2015 there had been no “Leakage” (as defined) and there would be no “Leakage” in the period up until Completion. The SSPA, furthermore, provided for payments to be made in Euros, save in respect of the Subordinated Debt Amount, which was to be paid in US Dollars (Clause 20).

Specifically, Schedule 15 to the SSPA contains various definitions, as follows:

The Preamble includes the following:

Clause 1.1 states that:

Clause 2 of the SSPA provides, inter alia, that:

Clause 3 provides:

As for Schedule 12, as referred to in Clause 3, the draft “Transfer Agreement” includes the following wording by way of recitals:

Clause 6 of the SSPA (“No Leakage Undertaking”) provides:

By paragraph 1.8 of Part B of Schedule 4 to the SSPA, NBG warranted to QNB that:

Clause 17 provides:

Clause 20 of the SSPA provides for the manner in which payments due under it were to be made, including:

As far as the SSPA’s treatment of the Finans Leasing shares was concerned, as previously noted, the Purchase Price was stated to be in respect of the “Shares”. No specific provision was made in respect of NBG’s Finans Leasing shares. There was, in particular, no direct obligation on NBG to transfer those shares to Finansbank before Completion. However, as Mr Valentin pointed out and as Mr Parker, in effect, acknowledged, the SSPA did contain certain provisions which showed that it was expected that this would occur. Thus, Clause 7 of the SSPA provides, inter alia, that:

Having entered into the SSPA, the next day, 22 December 2015, NBG issued a Press Release, which stated:

NBG also, the same day, produced an investor presentation entitled “Finansbank sale: significant capital and liquidity enhancement” which similarly referred to NBG having entered into a “definitive agreement” with QNB, before going on to record in the third bullet point under “Key messages” that the purchase price of €2.75 billion, payable in cash, “implies a transaction P/TBV Q3’15 around 1.0x, at a premium to average current market valuations of Turkish peers”. Later on, under “Transaction highlights”, this document described the “Transaction details” as being:

Involves the sale of 99.8% of Finansbank and 29.9% of Finans Leasing

QNB to refinance fully the USD 910m Tier 2 facility at closing.”

The same day as the SSPA was entered into, 21 December 2015, QNB and NBG entered into a side letter (the ‘QNB Side Letter’) relating to “Management retention and incentive arrangements”. This referred to the SSPA (Clause 1.1) as well as the IFAs (Clause 1.2), together with the Claimants’ employment contracts as extended (Clause 1.3), and then goes on (under the heading “PAYMENT UNDERTAKING AND INDEMNITY”) to provide as follows:

Clause 2.3, then, deals with the situation in which the Claimants made a claim against NBG for non-payment of the Fee; Clause 2.4 entails a warranty from NBG that it had provided true and accurate copies of the IFAs; and Clause 2.5 constitutes QNB’s acknowledgement that it had received copies of the IFAs, which were deemed disclosed “notwithstanding the fact that they had not been referred to in the Disclosure Letter or uploaded to the Data Room”. Clause 3 (“EFFECT AND TERMINATION”) is, then, in these terms:

The significance or otherwise of the QNB Side Letter, together with a related conflict of recollection on the part of Mr Mylonas and Dr Aras (as well as Mr Guzeloglu) concerning a meeting which took place on 17 December 2015, are matters which I shall come to consider later when dealing with the Claimants’ (alternative) estoppel by convention case.

Coming on, lastly and briefly, to deal with completion, this had several aspects.

On 1 February 2016, NBG approved the sale and transfer of its shares in Finans Leasing to Finansbank. On 16 February 2016, NBG notified QNB of the transfer, purportedly as a transaction which involved “Leakage” of €38,886,563.04. Specifically, NBG wrote to QNB saying this:

As Mr Valentin put it and as Mr Mylonas essentially acknowledged during the course of his cross-examination, although the consequences as regards the interpretation to be afforded to the IFAs is a matter which I shall come on to address, the economic reality of this arrangement was that, pursuant to the SSPA: (i) as was assumed in QNB’s Binding Offer letter of 23 November 2015, Finansbank had acquired NBG’s Finans Leasing shares; (ii) NBG had received payment in full in respect of the Finans Leasing shares; (iii) when QNB acquired the Finansbank shares at Completion, it thereby also acquired the Finans Leasing shares; and (iv) the reason that QNB paid only €2.711 billion at Completion was that NBG had already received the residual amount from Finansbank (which was for all practical purposes acting on behalf of QNB) in February 2016.

On 31 March 2016, the published “Equity Book Value” of Finansbank at Q2, 2016 was: (excluding NBG’s Finans Leasing shares) TL9,232,092,000 (or €2,877,744,459 at the 3.2081 TL-€ exchange rate applicable on that date); (including NBG’s Finans Leasing shares) TL9,418,149,000 (or €2,935,740,469).

On 15 June 2016, completion of the SSPA took place, and the transfer of the Subordinated Debt took effect. QNB paid NBG €2,711,113,000 to acquire the Finansbank shares and US$910 million in respect of its subordinated debt.

The principles concerning contractual interpretation occupy ground which has been very well trodden in recent years. The then Chancellor, Sir Terence Etherton (now the Master of the Rolls), indeed, in Credit Suisse Asset Management LLC v Titan Europe 2006-1 PLC & Others [2016] EWHC 969 (Ch) at [23]) described how the parties in that case relied upon “the usual cohort of authorities”, listing Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896, Chartbrook Limited v Persimmon Homes Limited [2009] 1 AC 1101, Rainy Sky SA v Kookmin Bank [2011] UKSC 50, Re Sigma Finance Corporation [2009] UKSC 2 and Arnold v Britton [2015] UKSC 36. [2015] AC 1619. To that list may now be added Wood v Capita Insurances Services Ltd [2017] AC 1173 which was relied upon by both Mr Valentin and Mr Parker before me.

The key consideration, as Lord Hoffmann explained in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] AC 1101 at [14], is “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean”. This will be identified “by focussing on the meaning of the relevant words … in their documentary, factual and commercial context”, as Lord Neuberger put it in Arnold v Britton [2015] UKSC 36, [2015] AC 1619 at [15] before going on to explain that:

Lord Neuberger’s point (vi) is consistent with the fact that the actual understanding of either party as to what the contract meant is irrelevant and evidence of the parties’ subjective intentions is similarly inadmissible, as explained by Leggatt J (as he then was) in Tartsinis v Navona Management Company [2015] EWHC 57 (Comm) at [9]:

Nor is evidence of the parties’ pre-contractual negotiations admissible since what is known as “the exclusionary rule”, Lord Hoffmann explained in Chartbrook at [42], “excludes evidence of what was said or done during the course of negotiating the agreement for the purpose of drawing inferences about what the contract meant”. So, too, is evidence of subsequent conduct inadmissible. As Leggatt J put it in Tartsinis at [10]:

As to Wood, the most recent Supreme Court authority dealing with the principles applicable to contractual construction, in that case, Lord Hodge noted as follows at [10]:

It is with these principles in mind that I come on next to consider the parties’ rival contentions which I summarise below, after first saying something about the formula contained in the Appendix to the IFAs.

It will be recalled that Clause 4.1 of the IFAs provides that “The Fee payable in respect of an Exit Event will be determined in accordance with the provisions set out in the Appendix to this Agreement”.

As for the Appendix to the IFAs, as will again be recalled, this provides that the Fee is to be calculated by reference to ‘price to book’ ratios, specifically through a comparison of values “A” and “B”, with “A” being the value of Finansbank “by reference to the Exit Value” (“C”) divided by “the last Equity Book Value published in accordance with the BRSA standards before the Exit Event” (“D”), and “B” being calculated by a formula that is applied to the market capitalisations and last equity book values of two other banks listed on the Istanbul Stock Exchange.

It is in relation to “A” that the dispute exists since there is no issue as to “B”: if the value of “A” is greater than or equal to one (1), then, a Fee is payable; conversely, if the value of “A” is less than one (1), then, no Fee is payable. Put another way, a Fee is payable only if the “Exit Value” exceeds or equals the relevant applicable “Equity Book Value”.

It is in this context that the four areas of dispute which I have previously identified arise, namely (in the order favoured by Mr Parker which differs from the order described by me earlier and the order in which I propose to deal with things below): (i) whether “the value of the Company by reference to the Exit Value” includes the sum of US$910 million received by NBG as part of the transaction in respect of the Subordinated Debt; (ii) whether “the value of the Company by reference to the Exit Value” includes the sum of €38,887,000 that was received by NBG as part of the consideration for the transaction in respect of its stake in Finans Leasing; (iii) what is the correct approach to the applicable currency exchange rate when comparing the “Exit Value” and the “Equity Book Value”; and (iv) when is the “last Equity Book Value published in accordance with the BRSA standards before the Exit Event”.

The Claimants’ primary case (and so putting to one side, for the present, their alternative estoppel case) is that, as a matter of construction, the appropriate analysis is as follows:

The relevant “Exit Event” was the execution of the SSPA on 21 December 2015. That was a “Total Exit Event” because it involved the disposal by NBG to QNB of 50% or more of the “The NBG Holding”. The IFAs draw a clear distinction between the “Exit Event” and “Completion” of an “Exit Event”: thus, the SSPA itself was the “Exit Event” and the closing of the SSPA (in June 2016) was “Completion” of that “Exit Event”. Execution of the SSPA constituted the relevant “disposal” for these purposes.

It follows that the “last Equity Book Value published in accordance with the BRSA standards” before the SSPA was that as at 30 September 2015. That date was also the “Locked Box Accounts Date”, under the SSPA, and was, therefore, the relevant book value by reference to which both NBG and QNB had negotiated, agreed and executed the transaction. Any value increase after that date was exclusively to QNB’s account.

In order to compare (as the Appendix to the IFAs requires) “the value of the Company by reference to the Exit Value” (which was denominated in Euros) with the Equity Book Value as at 30 September 2015 (which was denominated in Turkish Lira), the approach which gives best effect to the purpose of the IFAs by creating a predictable incentive for the Claimants is to convert the (Turkish Lira denominated) Equity Book Value into Euros, and the only rational date on which to convert the relevant (Turkish Lira denominated) “Equity Book Value” into Euros is the same date as the “Equity Book Value” (30 September 2015). To perform the conversion on any other date would involve using a different exchange rate to the one that was applicable on the accounting date (30 September 2015) and would, therefore, give rise to a fictional amount affected by whatever fluctuations had occurred in the TL-€ exchange rate since the relevant accounting date. Put simply, it would then no longer represent the “Equity Book Value” as at 30 September 2015, which the IFAs assumed would remain a constant for comparison purposes.

The “Equity Book Value” as at 30 September 2015 was TL9,099,950,000. Converted into Euros by reference to the 3.4212 TL-€ exchange rate applicable on that date, the relevant Equity Book Value that constitutes the Denominator (D) in the formula in paragraph 2 of the Appendix to the IFAs was, therefore, €2.659 billion.

Furthermore, Mr Valentin submitted, identification of “C” (the “value of the Company by reference to the Exit Value”) involves identifying “the value of the Company by reference to the aggregate value of the consideration paid in respect of the disposal by NBG to [QNB] of … The NBG Holding” (combining the IFA’s definitions of “C”, “Exit Value” and “Exit Event”), and this covers not only the amount paid for NBG’s shareholding in Finansbank (€2.711 billion) but also the amount which NBG received from Finansbank in respect of the Finans Leasing shares (€38,886,563). The position, Mr Valentin explained, taking no account of the Subordinated Debt, is as set out in the table below:

Although it is not necessary to go further than this in order for the Court to conclude that the Claimants are entitled to receive a Fee, Mr Valentin went on to submit that the aggregate value of the consideration paid in respect of the disposal to QNB of The NBG Holding also included the amount of the Subordinated Debt, US$910 million, paid by QNB to NBG. This, he submitted, ought to be the case because: (i) from the outset of the sale process the Subordinated Debt was treated by NBG as an essential element which was part and parcel of the same transaction, and (ii) the Subordinated Debt was only identified separately in the SSPA, and paid as a separate amount into a separate bank account, owing to the fact that it was denominated in US Dollars rather than Euros. If the Subordinated Debt is included, then, Mr Valentin pointed out, “C” is €3.55 billion and dividing this by “D” (€2.659 billion) gives 1.3382 if the Finans Leasing shares are included and 1.3235 if they are left out of account.

Turning to NBG’s position, the focus of the IFAs, Mr Parker submitted, was on the actual disposal by NBG of its shares and the actual receipt by NBG of payment for those shares. This, he submitted, is illustrated by the facts that: the IFAs provide for the possible payment of a Fee linked to the “disposal” by NBG of its shares in Finansbank (Clause 1); the event which would potentially give rise to the payment of a Fee was an “Exit Event”, which was defined as the “disposal” by NBG of its shares in Finansbank, and not merely an agreement by NBG to dispose of its shares (Clause 3); the value to be attributed to such a disposal, the “Exit Value”, was the “consideration paid” in respect of an “Exit Event”, not the consideration agreed to be paid (Clause 2); and any Fee would not fall due until after “Completion” of an “Exit Event”, which meant the “receipt” by NBG of the consideration payable with respect to an “Exit Event” (Clause 2).

Secondly, Mr Parker submitted, the assessment of whether the “Exit Value” was at a premium to book value is to be carried out as at the date when the consideration is paid (which is what constituted the “Exit Value”), or alternatively as at the date of the “Exit Event” (which is what trigged the potential Fee). In either case, the “Exit Value” has to be converted into Turkish Liras as at that date in order to compare it with the “Equity Book Value” of Finansbank. It would be meaningless to determine what the value of the “Exit Value” in Turkish Liras would have been on some earlier date: it has to be determined as at the date upon which it is paid (or on which the disposal of the shares takes place). The date upon which the “Equity Book Value” was last published is only identified as being the date on which that figure is most recently available. The comparison with the company’s “Equity Book Value” is made on the assumption that it remains the same as at the date on which the price is paid (or the “Exit Event” takes place).

Thirdly, Mr Parker submitted, since the IFAs were specifically concerned only with the disposal of NBG’s shares in Finansbank, the “Exit Event” being expressly confined to a disposal of those shares, the sale of the Subordinated Debt would not comprise an “Exit Event” and would not trigger a potential Fee under the IFAs. The “Exit Value” comprised the €2.711 billion paid to NBG for its shares in Finansbank. The money paid to NBG for the Subordinated Debt did not form part of the “Exit Value”. It was not part of the price paid for the shares but for an entirely separate asset, namely the debt owed by Finansbank to NBG. Had the parties intended that any payment for the Subordinated Debt should be included in the “Exit Value”, the IFAs would have said so. Moreover, the requirement that the shares in Finansbank be sold at a premium to book value requires a comparison between the value of the company’s net assets and the price paid for those assets. The Subordinated Debt was not an asset of Finansbank. To include the price paid for that asset as part of the “Exit Value” would, Mr Parker submitted, be to render that comparison meaningless.

Similarly, and fourthly, although NBG also held, separately, a 29.87% shareholding in Finans Leasing, the IFAs made no mention of that shareholding. It was not included within the definition of the “NBG Holding”, the disposal of which would comprise an “Exit Event” and trigger the potential payment of a Fee.

It is against this background that I come on to address the issues. Although I agree with Mr Parker that, logically, the first issue to consider is what is included in the “Exit Value”, and so whether the “value of the Company” (“C”) includes what was paid for the Subordinated Debt and the shares in Finans Leasing, I propose nonetheless to deal with matters in the order suggested by Mr Valentin, namely starting with issues (iv) and (iii) (in that order) and only then coming on to address issues (i) and (ii). This is because it was common ground between Mr Valentin and Mr Parker that, if the Claimants are right in relation to issues (iii) and (iv), then, a Fee is payable because the value of “A” is greater than one (1) regardless of whether they are also right in relation to issues (i) and (ii). Put differently, if the Claimants are right in relation to issues (iii) and (iv), the significance of issues (i) and (ii) is limited to the amount of the Fee which is payable.

At the core of the question which arises here is whether, on the proper construction of the IFAs, the “Exit Event” was (as the Claimants maintain) execution of the SSPA on 21 December 2015 (so as to mean that the last “Equity Book Value” for the purposes of the formula contained in the Appendix to the IFAs was that published on 30 September 2015) or (as NBG contends) the Completion of the SSPA on 15 June 2016 (so as to mean that the last “Equity Book Value” was that published on 31 March 2016).

The significance of this dispute lies not only in the ascertainment of the last “Equity Book Value”, this being significantly higher on 30 March 2016 than it was on 30 September 2015, but also, as Mr Parker explained, in the determination of the date when the value of “C” is to be converted into Turkish Lira (and so issue (iii)).

It was Mr Parker’s submission, as previously mentioned, that the plain meaning of the words in the IFAs is that the “Exit Event” was the date upon which NBG actually transferred its shares in Finansbank to a third party. He submitted, in particular, as just observed, that an “Exit Event” must entail the “disposal” by NBG of its shares in Finansbank, and not merely an agreement to sell those shares, in circumstances where the completion of the sale under the SSPA was subject to a number of contingencies. He cited, in this context, the fact that the sale was conditional, for example, upon the sale being approved by the Turkish Competition Board, the Turkish Banking Regulatory Supervising Agency (BRSA) and the Qatar Central Bank. If any of those entities had objected to the sale, Mr Parker explained, it would not have been able to have gone ahead. Accordingly, Mr Parker reasoned, the SSPA itself cannot fairly be considered a “disposal” of NBG’s shares since NBG might never dispose of its shares at all.

Mr Parker went on to submit that the reason why the IFAs distinguished between an “Exit Event” and “Completion” is not because the former is to be taken as being when a sale is agreed but because the “Exit Event” is the “disposal by NBG” of its shares whereas “Completion” is “the receipt by NBG of the consideration payable”. This, Mr Parker submitted, is consistent with the fact that Clause 3 refers to “The Executive” being “entitled to a Fee” only “following the Completion of an Exit Event”, and so with the relevant distinction, for present purposes, being not between the time when a sale is agreed and completion of that sale but between the time when shares are transferred pursuant to the agreement to sell and payment of the agreed consideration.

I do not agree with these submissions for a number of reasons. It is clear, as Mr Parker’s submissions themselves recognised, that there is a distinction to be found in the IFAs between an “Exit Event” and “Completion” of an “Exit Event”. Thus, Clause 4.1 provides, in terms, that the “Fee payable in respect of an Exit Event” will be determined in accordance with the provisions set out in the Appendix. The focus here, therefore, is on the “Exit Event” rather than “Completion”. The fact that Clause 3 refers to the Fee being payable “following the Completion of an Exit Event” does not shift that focus but merely fixes the point in time when the Fee is payable. Perfectly sensibly, the agreement is that NBG should not have to pay anything until it has itself been put in funds by its purchaser. It is, however, the fact that there has been an “Exit Event” which is material, as made clear by the fact that the first paragraph of Clause 3 states that “For the avoidance of doubt, no fee will be payable if there is no Exit Event”. If there is no “Completion”, this means that NBG will not have been paid and so the obligation to pay the Fee will not come into play, but this does not mean that it is “Completion” which is itself the “Exit Event”.

As I have observed, Mr Parker did not, in fact, however, seek to argue that there was not this distinction. The issue, in the circumstances, is whether Mr Parker was right when he submitted that there is a distinction between disposal of the shares (what Mr Parker would say constituted the “Exit Event”) and receipt of the consideration payable in respect of that disposal (“Completion” as defined in the IFAs). This boils down to whether the words “the disposal by NBG” contained in the definition of “Partial Exit Event” or, more relevantly in this case, “Total Exit Event”, means actual disposal of NBG’s shares in Finansbank or an agreement (in the form, in the event, of the SSPA) to sell those shares to a third party. Although there is a certain attraction to Mr Parker’s straightforward reliance on the word “disposal” meaning actual transfer of NBG’s shares, as opposed to an agreement to transfer such shares, I am not persuaded by his argument. It seems to me, on the contrary, that “disposal” in the context of the IFAs, must mean the latter rather than the former. I struggle, in essence, to see how it can be right that, NBG having entered into the SSPA and so having becoming contractually bound to sell to QNB, nonetheless there was no “disposal” for the purposes of the IFAs. As Mr Valentin submitted, had NBG failed to perform its obligations under the SSPA, QNB would, in all likelihood, have been able to obtain an order for specific performance requiring NBG to proceed with the sale. NBG was committed to sell to QNB having concluded the SSPA. Completion, both as defined in the IFAs (as meaning “the receipt by NBG of the consideration payable with respect to that Exit Event”) and as more generally understood (as meaning transfer of shares and payment for that transfer), was going to happen in accordance with the obligations (both on the part of NBG and on the part of QNB) contained in the SSPA. In practical terms, therefore, it was the SSPA which amounted to the relevant “disposal” for the purposes of the IFAs.

It follows that I do not accept the validity of the distinction which Mr Parker sought to draw between share transfer and receipt by NBG of the consideration paid (by QNB, in the event) in respect of the shares. This is a distinction which, in my view, is rather too subtle and which I somewhat doubt would have been at the forefront of the parties’ minds when they entered into the IFAs. These were agreements which, whilst drafted by lawyers and whilst relatively sophisticated, were clearly not the most sophisticated of their kind. I am clear, in the circumstances, that, in using the language of “disposal”, it would not have been intended that there should be the distinction which Mr Parker suggested. As I have already observed, completion is generally something which entails the carrying out of what has previously been agreed should happen: in the case of a sale, transfer of the item being sold, and payment of the price agreed in respect of that item. It is most unlikely, in the circumstances, that the parties to the IFAs would have had in mind that completion should be approached on the basis now suggested by Mr Parker. The fact that the definition of “Completion” in the IFAs refers only to receipt of the consideration paid by the purchaser does not change matters. The more so, since it would have been a straightforward matter for the parties to have spelt out the distinction if it had been one which they intended should operate. Instead, as Mr Valentin submitted, they used what he described as the more adaptable language of “disposal” in order to cater for a number of possibilities which were, by definition unforeseen in December 2011, when the IFAs were entered into.

There is a further reason why I cannot accept Mr Parker’s submissions on this issue. This is that, since the purpose of the IFAs (as described in Clause 1) was to incentivise the Claimants to use their best efforts to dispose of NBG’s interest in the Finansbank Group, then, it is difficult to see why the focus should be on anything coming after the time when the SSPA was entered into. It was at that point, as already mentioned, that NBG entered into a binding agreement to sell Finansbank. It was at that point that the price was agreed with QNB (subject only to “Leakage”) and, as such, as Mr Valentin put it, the Claimants’ mission, as it were, had been accomplished: they had either succeeded (because the “Exit Value” achieved by NBG was, in fact, equal to, or greater than, the “last Equity Book Value”), or they had failed (because the “Exit Value” achieved by NBG was, in fact, less than the “last Equity Book Value”), but, either way, they had done what they had been incentivised by the IFAs to do. This consideration, in my view, provides considerable support for the Claimants’ case that the relevant “Exit Event” is NBG’s entry into an agreement to sell (in the event, the SSPA) and that, as such, the relevant last “Equity Book Value” is the September 2015 book value which was available to the parties when negotiating the agreed value specified in the SSPA. After the SSPA was concluded, the Claimants were in no position to influence the achievement of a higher “Exit Value”. More than that, as Mr Valentin pointed out, after the “Locked Box Accounts Date” (30 September 2015), any additional value or losses accruing to Finansbank would naturally fall to the account or for the benefit of QNB. It follows that, after execution of the SSPA, the positions of the Claimants and NBG ceased to be aligned.

This last point was something which Mr Mylonas accepted in cross-examination albeit that he rightly made the point that there was nonetheless a continuing alignment in other respects. For example, in his closing submissions, Mr Parker observed that since, in the event of “Leakage” between the date of the SSPA and the closing date, the price payable by QNB for NBG’s shares would be reduced, so the Claimants were in a position to try to minimise this and maximise the “Exit Value”. It is, however, the fact that there was no longer total alignment after the SSPA had been entered into and, in any event, that matters for present purposes. In short, whatever incentive existed after the SSPA had been entered into was necessarily more limited than it had been before that event occurred and there was no longer the complete identity of interests between the Claimants and NBG which had previously existed. In fact, however, the point goes further than this since I agree with Mr Valentin when he went on to submit that, if the correct interpretation of the IFAs is that the “Exit Event” is when NBG’s shares in Finansbank were actually transferred to QNB, notwithstanding that the “Exit Value” is the amount of consideration which in the SSPA it was agreed would be paid, then, this would create what Mr Valentin characterised as “a perverse incentive” on the part of the Claimants to ensure that they received a Fee under the IFAs or to ensure that the Fee was higher than it might otherwise have been by seeking to cause a reduction in Finansbank’s “last Equity Book Value” before transfer of NBG’s shares, the relevant “Exit Event” on this hypothesis. It seems to me that it is most unlikely that, in drafting the IFAs, the intention can have been that this situation could potentially arise. It is nothing to the point that, as Mr Parker pointed out in his closing submissions, Dr Aras accepted in his evidence that the Claimants “would never even contemplate taking such actions”, nor that this would involve the Claimants acting in breach of their obligations as employees of Finansbank. What matters is that it is unlikely that, in entering into the IFAs, the parties would have contemplated that the Claimants would find themselves in the situation which I have described, however implausible it might be that, in practice, the Claimants would act in such a way. I would add that it is also nothing to the point that, as Mr Parker submitted, the IFAs did not expressly require the Claimants to do anything as such to maximise the amount received by NBG for its shares since the intention which lay behind the IFAs was clearly spelt out in Clause 1, namely that the Claimants should use their “best efforts to dispose of NBG’s interest in the Finansbank Group”.

I conclude, therefore, that the relevant “Exit Event” in this case was the execution of the SSPA on 21 December 2015. It follows that “the last Equity Book Value published in accordance with the BRSA standards before the Exit Event” (“D” in the Appendix to the IFAs) was that which was published on 30 September 2015, namely TL9,099,950,000.

It is precisely because this “Equity Book Value” is denominated in Turkish Lira that issue (iii) arises – more specifically still, because NBG solicited bids for the sale of its stakes in Finansbank and Finans Leasing denominated in Euros and, as a result, the bulk of the consideration which QNB agreed to pay NBG under the SSPA to acquire the Finansbank shares was stated in Euros and ultimately paid to NBG in Euros. It follows that, as both Mr Valentin and Mr Parker agreed, in order to perform any meaningful comparison between the “Exit Value” and the “last Equity Book Value” in accordance with the Appendix, it is necessary to identify the date on which any currency exchange calculation is to be performed.

To reiterate, the Claimants’ position on this is that there should be a conversion of the “Equity Book Value” from Turkish Lira to Euros by reference to the TL-€ exchange rate applicable on the accounting date which, as a result of my determination in relation to issue (iv), is 30 September 2015. NBG, on the other hand, contends that the correct approach is to carry out the relevant conversion either on the date of “Completion” on 15 June 2016 (and so on the date when “Exit Value” is achieved in the sense that NBG has received payment for its shares) or on the date when the SSPA was entered into (21 December 2015) and to convert the “Exit Value” from Euros to Turkish Lira. To be clear, as Mr Parker pointed out in closing and as ultimately Mr Valentin appeared to acknowledge, which way round the conversion is carried out (from Turkish Lira to Euros or from Euros to Turkish Lira) does not matter; what matters, as Mr Parker put it, is “the timing of the date” rather than “the direction of travel”.

In support of NBG’s case, Mr Parker emphasised that, in accordance with the definition of the term in the IFAs, the “Exit Value” was not the price which QNB agreed to pay for NBG’s shares but “the consideration paid in respect of an Exit Event”. He did so in order to make the point that what actually came to be paid might not be the same as the “Purchase Price” for the shares stated in Clause 2.1 of the SSPA (€2.75 million on the assumption that Finansbank owned 100% of the shares in Finans Leasing) since the price actually to be paid to NBG was subject to adjustment under the terms of the SSPA. He gave as an example Clauses 5.1 and 5.2 of Schedule 14 to the SSPA which provide that, following the conclusion of the SSPA, an audit of Finansbank’s net asset value as at 30 September 2015 was to be carried out and, insofar as this was lower than stated, the price would fall to be reduced. He referred also to the provisions (Clauses 6.4 and 6.5) concerned with “Leakage” prior to the closing date which envisaged monies being deducted from the price to reflect the “Closing Leaking Deduction”. In view of this, Mr Parker went on to submit, it cannot be known what the “Exit Value” was in Turkish Lira (as opposed to Euros) until the date of payment by QNB to NBG. It follows from this, Mr Parker submitted, that in order to make the comparison demanded by the Appendix to the IFAs (namely the comparison between “the value of the Company by reference to the Exit Value” (“C”) and the “last Equity Book Value published in accordance with the BRSA standards before the Exit Event” (“D”)), it is likewise necessary to carry out the conversion as at the date of payment, and not before. It was Mr Parker’s submission that, on the other hand, if the last accounts date were to be taken as the conversion date, the question would become a different inquiry to that envisaged by the Appendix since it would involve asking whether the price paid would have represented a ‘premium to book’ value had it been paid over eight months earlier - assuming that, as I have decided, the “Exit Event” is the date when the SSPA was entered into and so that the relevant book value is as at 30 September 2015. Mr Parker suggested that that question cannot have any relevance to whether the Claimants should be entitled to a Fee.

NBG’s essential position, therefore, was that the Appendix comparison requires (implicitly given that the Appendix actually says nothing about currency differences) the currency exchange to be performed whenever the “Exit Event” is determined to be (21 December 2015) and not the date of the “last Equity Book Value published in accordance with the BRSA standards before the Exit Event”. That this is, indeed, NBG’s position was demonstrated by what Mr Parker had to say in an email to the Court sent on 8 May 2018, and so after the trial had come to an end, which attached a diagram “to demonstrate that it makes no difference whether the ‘Equity Book Value’ is converted into Euros on 30 September 2015, or the ‘Exit Value’ is converted into Turkish Liras on that date”. The diagram showed, unsurprisingly, that whether the conversion is done from Turkish Lira to Euros or the other way round, the result is the same provided that the conversions are done on the same dates. More significantly for present purposes, it was Mr Parker’s submission that “If the FX date is 30 September 2015, one is always effectively asking whether the Exit Value would have constituted a premium to book value had it been agreed (or paid) on 30 September 2015 itself”. As Mr Valentin pointed out, however, in a note which he prepared containing the Claimants’ “observations” on the diagram, NBG’s position overlooks the simple fact that the formula for the determination of “A” in the Appendix expressly requires a comparison to be made between two things which were almost inevitably going to be on different dates, namely “the value of the Company by reference to the Exit Value” (“C”) and the “last Equity Book Value published in accordance with the BRSA standards before the Exit Event” (“D”). It is theoretically possible that the two dates could be the same but it is somewhat unlikely that a purchaser in QNB’s position would be willing to enter into a sale agreement without looking into the most recent book value of the company and taking time to do this properly. It follows that I agree with Mr Valentin’s submission on this point and not Mr Parker’s submissions. I am clear that the right approach in a case such as the present, where different currencies are involved and where the IFAs are themselves silent on the issue, is to ask what a reasonable person, with the parties’ background knowledge, would have understood the parties to have intended at the time that the IFAs were entered into. In my view, the answer to that question is clear: that the only viable date on which to convert the “last Equity Book Value” (“D”) is the relevant book date, namely 30 September 2015. To approach the matter in any different way would be to distort the formula contained in the Appendix to the IFAs since the comparison would no longer be between “C” and “D” (a figure based on a 30 September 2015 book value) but between “C” and something other than “D” (a figure based on a 30 September 2015 book value which has, crucially, undergone a revision based on a conversion carried out on some other date altogether). This is for an obvious reason: taking a different date (and so a different exchange rate) would introduce whatever currency fluctuations there will have been between 30 September 2015 and the later date used for exchange purposes. Put simply, it seems obvious to me that, in order to work out what the equivalent Euro figure is for “D”, the book value as at 30 September 2015, it is necessary to carry out the currency conversion from Turkish Lira to Euros on that date rather than on some other date since taking some other date will not produce an equivalent Euro figure but instead some other figure altogether, namely a value which is not reflective of the actual value of Finansbank as at 30 September 2015 and not, for this reason, the Euro equivalent of the Turkish Lira book value as at that date.

Although I do not place too much reliance on it, there is a further point which should not be overlooked. This is that the approach adopted by the Claimants means that it was able to be known by NBG (and the Claimants also once they learned of the price agreed with QNB under the SSPA) from an early stage what amount in Euros would need to be achieved in terms of “Exit Value” in order to meet or exceed the “last Equity Book Value”. All that needed to be done was to carry out a conversion from Turkish Lira to Euros as at 30 September 2015. On NBG’s approach, however, there would be no such ability since it would only be when the “Exit Value” was converted from Euros to Turkish Lira on the “Exit Event” (on NBG’s primary case on completion and, in any event, not earlier than 21 December 2015 when the SSPA was entered into) that it would be possible to perform the relevant calculation given the inevitable exchange rate fluctuation which will have occurred in the meantime. Mr Parker dismissed this point in his closing submissions, observing that there is no reason why it would not be possible to perform a calculation in December 2015, just as NBG was about to enter into the SSPA and so with knowledge of the price to be agreed with QNB, by reference to the “Equity Book Value” on 30 September 2015 but using a currency exchange rate as at December 2015 rather than 30 September 2015. The answer, however, is that until such time as the SSPA has been entered into (on NBG’s alternative case) or until such time as there has been completion (on NBG’s primary case), any such comparison is necessarily not as certain as a calculation which uses a (fixed) currency exchange date of 30 September 2015.

I would just add that I am unswayed from the conclusion which I have reached on this issue by Mr Parker’s reliance on the fact that in QNB’s Binding Offer letter dated 23 November 2015 the exchange rate used to compare the price offered with Finansbank’s net book value was not the one prevailing on 30 September 2015 but a different rate (3.0494) - probably the date on which QNB was making its offer. Although Mr Parker characterised the use of a different exchange rate in the Binding Offer as “destructive” of Mr Valentin’s submissions on the appropriate date to use for exchange purposes, it does not seem to me that this really assists me in interpreting the IFAs in circumstances where these are, after all, contracts made not between QNB and NBG but between the Claimants and NBG.

I conclude, therefore, that the correct approach in this case is to convert the “Equity Book Value” from Turkish Lira to Euros as at 30 September 2015. Taking the “Equity Book Value” as at that date, TL9,099,950,000, and converting this into Euros, again as at that date, at the then applicable exchange rate, 3.4212 TL-€, results apparently in “D” equating to €2.659 billion. Taken together with the conclusion which I have reached as to issue (iv), the consequence, Mr Valentin pointed out and Mr Parker did not dispute, is that the value of “A” is greater than one (1), and a Fee is payable irrespective of whether the Claimants are right also about issues (i) and (ii). I come on, however, now to consider those issues since they have a bearing on the size of the Fee which is recoverable by the Claimants.

The first of these issues is concerned with the Subordinated Debt and so the US$910 million which NBG received from QNB in relation to that.

The starting point here is that the “Exit Value” is defined in the IFAs as being “the aggregate value of the consideration paid in respect of an Exit Event …”. On this basis, since, so Mr Valentin suggested, the refinancing of NBG’s Subordinated Debt was an integral part of the transaction entered into with QNB and so formed part of the “aggregate value of the consideration paid in respect of an Exit Event”, as demonstrated by the fact that confirmation that this debt would be refinanced as part of the transaction was specifically identified in the Phase I letters sent out to potential bidders (including QNB), and by the further facts that QNB’s Binding Offer letter contained the requisite confirmation and the Subordinated Debt formed part of the SSPA. Mr Valentin went on, in this context, to make the point that the only reason that the transfer was addressed separately in the SSPA, rather than within the “Purchase Price”, was that a separate agreement was required to carry out the transfer and, since it was denominated in US Dollars, payment was to be made in that currency to a US Dollar denominated bank account. Mr Valentin relied, for these purposes, upon how Dr Aras put things in his witness statement, as follows:

The difficulty with these submissions, however, is that they do not square with the wording used in the IFAs themselves. It can hardly be overlooked that the reference to “the consideration paid in respect of an Exit Event”, when read in conjunction with the definition of “Exit Event” and, through that, the definition of “Total Exit Event” (or, for that matter, “Partial Exit Event”) means, in effect, consideration paid in respect of the disposal of NBG’s shares in “The NBG Holding” which, in turn, means “NBG’s holding of ordinary shares of common stock and the founders’ shares in the Company [Finansbank] as at the date of this Agreement”. In short, the consideration with which the IFAs were concerned is consideration paid by a purchaser to NBG in return for receiving NBG’s shares in Finansbank. The focus of the IFAs is, accordingly, very specific, making it difficult to see how it can be right to broaden that focus so as to encompass not only NBG’s shares in Finansbank but also the Subordinated Debt. Although Mr Valentin submitted that NBG’s approach involves a “strained interpretation” of the wording contained in the IFAs, that is not a criticism which, in my view, is warranted. On the contrary, it seems to me that it is the Claimants’ position which strains the wording used by seeking to read into the IFAs words which not only are not there but which, were they to be treated as being included, would necessarily expand the ambit of the words actually used in a significant respect. That would not be appropriate, however much Mr Valentin might suggest that NBG’s position ignores “the commercial reality of the transaction” in which NBG made the purchase of the Subordinated Debt a condition of the sale of Finansbank. However integral the sale of the Subordinated Debt might have been to the sale concluded in the SSPA, the fact remains that, as Mr Parker submitted, the Subordinated Debt was a quite different asset from the shares which NBG held in Finansbank.

Four further considerations should also be borne in mind. The first is that, as Mr Parker pointed out, the Subordinated Debt was in existence at the time that the IFAs were entered into. Accordingly, had the intention been that the consideration received in respect of the Subordinated Debt should also be included within the scope of the IFAs, this could very easily have been stated in the IFAs. That this was not done, and instead the only reference was to the shares held by NBG in Finansbank, is telling and, in my view, fatal to the submissions which Mr Valentin advanced on this issue. Secondly it is also worthwhile testing the position by asking what the position would be were the Subordinated Debt to have been sold not to QNB as part of the SSPA but to a third party (whether at the same time as the SSPA was entered into or at another time altogether and whether before or after the SSPA) and without the sale of the Subordinated Debt forming any part of a share sale. In that event, there could be no question of the sale of the Subordinated Debt amounting to a disposal for the purposes of the IFAs, and so of the sale having anything to do with “C” (the “value of the Company by reference to the Exit Value”). I struggle to see why it should make a difference that the Subordinated Debt was sold at the same time as NBG sold its shares in Finansbank to QNB. On the contrary, since the Claimants would not have been entitled to a Fee under the IFAs had the Subordinated Debt been sold separately, it would make no sense at all if they were entitled to a Fee simply because the Subordinated Debt was sold at the same time as NBG sold its shares to QNB.

This last point leads on to a third. This is that, in any event, it is open to some doubt (even assuming that it is a material consideration when seeking to construe the IFAs given that it is a post-contract matter) whether it really was the case that the sale of the Subordinated Debt was as integral to the sale to QNB as Mr Valentin suggested. This is because, whilst it is the case that NBG sought offers which related not only to its shares in Finansbank but also which covered the Subordinated Debt, Mr Mylonas was clear in the evidence which he gave that it was not, as he put it, a “necessary condition” that NBG should sell the Subordinated Debt at the same time as the shares in Finansbank. He explained the position as follows when being cross-examined by Mr Valentin, specifically having been asked why his position was that the Subordinated Debt and the Finans Leasing shares were not a “necessary condition” given that bids had been solicited on a basis that they should contain confirmation that the Subordinated Debt would be refinanced and that the Finans Leasing shares would be bought:

Furthermore and fourthly, looking at the commercial common sense of the matter, I agree with Mr Parker when he submitted that it is difficult to see why the “value of the Company by reference to the Exit Value” should be regarded as including the price paid for the Subordinated Debt in circumstances where the formula in the Appendix to the IFAs requires that a comparison be performed between Finansbank’s equity book value and “the value of the Company by reference to the Exit Value”. The latter requires not simply that the “Exit Value” is looked at, without more, but that “the value of the Company” is ascertained “by reference to the Exit Value”. As Mr Parker submitted, this means that if NBG had, for example, sold only 80% of its shares in Finansbank (and so that the price paid, the “Exit Value”, was for that proportion of shares rather than NBG’s entire shareholding in Finansbank), then, “the value of the Company” for the purposes of establishing what “C” comprises would be the price paid (the “Exit Value”) grossed up to give a hypothetical value for 100% of the shares in Finansbank. Put differently, the formula in the Appendix to the IFAs requires a comparison between what might be described as ‘100% values’, namely “C” (“the value of the Company”) and “D” (Finansbank’s “last Equity Book Value”). That “C” must be a ‘100% value’ necessarily follows from the fact that “D” is a ‘100% value’ since, unless both “C” and “D” are each a ‘100% value’, the comparison would involve a mismatch which would make it worthless as the ‘price to book’ comparison which the formula obviously envisages. It follows from this that, as Mr Parker submitted, it is only insofar as the money paid to NBG under the SSPA constituted the consideration for NBG’s shares in Finansbank that an assessment can be made as to whether those shares were sold at a ‘premium to book’ value. Put another way, to include a payment in respect of the Subordinated Debt, another asset rather than shares, would be to introduce an element which has no proper place in the calculation since that payment does not impact upon, or in any way reflect, the “value of the Company”. Indeed, if the price paid for the Subordinated Debt were to be included as part of “C”, the comparison with “D” (the “last Equity Book Value”) would mean that the comparison was no longer the ‘like for like’ comparison which the Appendix to the IFAs requires should be carried out. This would not only make no sense when seeking to arrive at a figure for “A”, but it would also make no sense in relation to the comparison which is then required between “A” and “B” since it will be recalled that “B” entails looking at the market capitalisation of two comparator banks where the focus is on the price at which shares are trading and nothing other than that. It follows that it would be quite illogical if “A” were to include any element which is not referable to share value.

My conclusion, in the circumstances, is that the Subordinated Debt ought not to be included in “C”, namely as part of “the value of the Company by reference to the Exit Value” for the purposes of performing the calculations required by the Appendix to the IFAs.

This brings me, admittedly in a somewhat roundabout way, to issue (ii) and the question of whether “the value of the Company by reference to the Exit Value” includes the €38,887,000 which QNB paid to NBG under the SSPA in respect of Finans Leasing.

Mr Parker submitted that, in essence, the position is similar to the position in relation to the Subordinated Debt: that money paid by Finansbank for NBG’s shares in Finans Leasing was not part of the consideration paid in respect of the disposal of NBG’s shares in Finansbank, and so should not be taken into account in applying the formula contained in the Appendix to the IFAs. In this regard, he made the point, as he did in relation to the Subordinated Debt, that the monies were paid for an entirely different asset, namely the shares which NBG directly held in Finans Leasing. Indeed, he pointed out, the monies were not even paid by QNB but by Finansbank itself. He also highlighted, again as he did in relation to the Subordinated Debt, that NBG held the shares in Finans Leasing at the time that the IFAs were entered into, observing that, if the parties had intended that the price paid for the shares in Finans Leasing should be included as part of the “Exit Value”, the IFAs would, and could easily, have said so.

Although, as I shall come on to explain, I agree with Mr Parker’s central submission that the Finans Leasing element of the SSPA is not covered by the IFAs, it nonetheless seems to me that the position in relation to the Finans Leasing shares is not entirely on all fours with the position in relation to the Subordinated Debt. As Mr Valentin pointed out, it was always intended that NBG would sell its shares in both Finansbank and Finans Leasing. This is reflected, indeed, in NBG’s Phase 1 letter, QNB’s Binding Offer and the SSPA itself. Whilst the same can be said concerning the Subordinated Debt, the difference is that the sale in relation to Finans Leasing was a sale of shares rather than something else altogether. Moreover, it was at all times expressly contemplated that the Finans Leasing shares would be transferred to Finansbank before completion of the sale to QNB took place. That, indeed, was the basis on which QNB made its Binding Offer. It was also how the Purchase Price payable by QNB under Clause 2 of the SSPA (€2.75 billion) was arrived at with the assumption being that Finansbank would own the Finans Leasing shares by the time that completion took place. It was only after the SSPA had been entered into that, on 16 February 2016, NBG notified QNB that it had transferred its Finans Leasing shares to Finansbank and received consideration with the Euro equivalent value of €38,886,563.04. In the same letter, NBG gave notice that it was treating this as “Leakage” under Clause 6.2 of the SSPA, meaning that this amount would, therefore, be deducted from the price payable by QNB on completion. The commercial reality, with which Mr Mylonas did not really quibble when asked about it in cross-examination, is that NBG ultimately ended up receiving €2.75 billion, as agreed in the SSPA, albeit that, in the event, it was Finansbank which paid NBG for its 29.87% stake rather than QNB, hence the reduction in the consideration passing from QNB to NBG. The only difference, in truth, if not in substance, was one of timing since the net effect was the same as had been agreed: NBG received the full €2.75 billion but, as regards the Finans Leasing element, through Finansbank rather than directly from QNB. As Mr Valentin explained, the characterisation of the acquisition by Finansbank of NBG’s Finans Leasing shares as “Leakage” under the SSPA, whilst correct, was somewhat artificial in circumstances where, as a result of Finansbank acquiring NBG’s 29.87% stake in Finans Leasing, the value of Finansbank rose by the value of the Finans Leasing shares which Finansbank thereby came to own, and so by an amount equivalent to the payment which Finansbank made to NBG for those shares. For these reasons, I have no difficulty in concluding that what ultimately happened as regards the Finans Leasing shares was, broadly at least, as NBG and QNB had agreed when entering into the SSPA. That, however, does not answer the separate question of whether the “aggregate value of the consideration paid” by QNB was, in all respects, “in respect of an Exit Event”, so as to mean that the full €2.75 billion (including the €38,886,563.04 in respect of the Finans Leasing shares) counts as the “Exit Value”.

That question depends on whether the Finans Leasing shares element constitutes an “Exit Event” which, in turn, depends on whether it would be appropriate to treat the sale of those (Finans Leasing) shares as amounting to a “disposal by NBG” of shares in “The NBG Holding” (defined as “NBG’s holding of ordinary shares of common stock and the founders’ shares in the Company as at the date of this Agreement”). In my view, this would not be appropriate for a very simple reason: “the Company” in the definition of “The NBG Holding” is not Finans Leasing but is Finansbank, which means that any disposal of shares in Finans Leasing does not come within the definition of “Exit Event” and so the €38,886,563.04 cannot qualify as “consideration paid in respect of an Exit Event”.

None of the submissions which Mr Valentin advanced provides an answer to this analysis. That, in my view, is because there is no satisfactory answer. In particular, the fact that, as Mr Valentin highlighted, Clause 1 of the IFAs is expressed in somewhat more general terms than the “Exit Event” definition, referring to the Claimants being incentivised to use their “best efforts to dispose of NBG’s interest in the Finansbank Group, directly or indirectly”, does not justify treating that definition as applying more generally to other companies within the Finansbank Group besides Finansbank. The more so, in circumstances where it is to be noted that the second paragraph of Clause 3 of the IFA entered into between Dr Aras and NBG expressly contemplates that NBG and Dr Aras might “agree and covenant to negotiate in good faith and execute additional agreements to provide the Executive with an opportunity to earn an incentive fee linked to the disposal of the Company’s shares in its subsidiaries”. This is wording which demonstrates that the “Exit Event” definition was intended very deliberately to be confined in scope to Finansbank itself, and not other companies within the Finansbank Group (including, therefore, Finans Leasing). In relation to other such companies, there would need to be a further agreement entered into. The fact that this additional wording does not appear in the other two IFAs makes no difference since plainly the IFAs need to be construed in a consistent manner.

Although Mr Valentin was inclined to suggest that Mr Parker’s submissions on this topic “ignore commercial reality and, in effect, advocate ‘a literalist exercise focused solely on a parsing of the wording of the particular clause’”, as Lord Hodge put it in Wood at [10], I reject that criticism since the fact that the “commercial reality” of the sale to QNB did not, in substance, change when Finansbank purchased the Finans Leasing shares from NBG (instead of QNB purchasing the shares directly from NBG) has no bearing on the construction which is appropriately to be accorded to the IFAs. The construction question hinges not on what, in the event, happened when NBG entered into the SSPA with QNB or in the lead-up to completion of the sale, but on what the parties should be taken as having agreed when they entered into the IFAs. What they agreed, as I have explained, was that the Claimants should receive a Fee where there had been a relevant “Exit Event”, and a sale of shares held by NBG not in Finansbank but in Finans Leasing does not, in my view, amount to an “Exit Event” for the reason which I have given. Simply because that sale formed part of a sale involving shares in Finansbank does not change matters, any more than would such a sale do so if it had been entered into independently.

I conclude, therefore, that (like the Subordinated Debt) the Finans Leasing element ought also not to be included in “C” for the purposes of performing the calculations required by the Appendix to the IFAs.

I come on, lastly, to deal with the Claimants’ estoppel by convention case. I do so for completeness, not because anything turns on the issue in view of the conclusions which I have reached in relation to the primary way in which the Claimants have advanced their claim.

There was no real issue between Mr Valentin and Mr Parker as to the relevant legal principles. In short, an estoppel by convention arises if (i) there is a relevant assumption of fact or law, either shared by both parties (or made by party B and acquiesced in by party A), and (ii) it would be unjust to allow party A to go back on that assumption.

The principles applicable were summarised by Lord Steyn in Republic of India v India Steamship Co Ltd (No 2) [1998] AC 878 at page 913E-G in this way:

The principles were helpfully further explained by Briggs J (as he then was) in HM Revenue & Customs v Benchdollar [2009] EWHC 1310 (Ch), [2010] 1 All ER 174 at [52] (as applied in subsequent cases such as Mitchell v Watkinson [2014] EWCA Civ 1472 and Dixon v Blindley Heath Investments Ltd [2015] EWCA Civ 1023, [2017] Ch 389), as follows:

In order to found an estoppel (whether by convention or by representation), Mr Parker submitted, relying upon what Jacob LJ had to say in SmithKline Beecham plc v Apotex Europe Ltd [2007] Ch 71 at [102], that the assumption (in the case of the former) or the representation (in the case of the latter) must be “unambiguous and unequivocal” since that “is inherent in the very nature of an estoppel”. Mr Parker submitted that this requirement stands notwithstanding that in ING Bank NV v Ros Rosa SA [2011] EWCA Civ 353, [2012] 1 WLR 472, when considering a submission to the effect that the shared common assumption must be sufficiently certain, Carnwath LJ (as he then was) described there being a qualification as far as estoppel by convention is concerned. Specifically, explaining that the submission under consideration arose out of a passage in the judgment of Ralph Gibson LJ in Troop v Gibson [1986] 1 EGLR 1 at page 6D-F, Carnwath LJ stated as follows at [64(ii)]:

Mr Parker submitted that this apparent conflict between two decisions of the Court of Appeal (three, if Troop is itself included) ought to be resolved by the Court favouring SmithKline Beecham, an authority which it appears was not cited to the Court of Appeal in ING Bank. His submission was that the analogy with a contract favoured by Sir John Arnold P in Troop (and approved by Carnwath LJ in ING Bank) is inapposite in an estoppel by convention case where the inquiry is as to the parties’ conduct (or assumption) rather than as to what the language used in a contract means. Whether there is, indeed, a conflict, however, as suggested by Mr Parker is something about which I am not convinced since it seems to me that, in truth, what is required (consistent with all three authorities) is that there is clarity over what comprises the common assumption (if there is such a common assumption) as determined by the Court and not by the parties. If there is no such clarity, then, there will be no relevant convention and so no operable estoppel. In any event, as Mr Valentin acknowledged, the present case is not a case which turns on such subtleties.

Lastly as to the relevant principles, specifically that identified by Briggs J in Benchdollar at [52(i)], it is clear that there does not need to be an expression of accord between the parties. On the contrary, as Hildyard J (sitting in the Court of Appeal) explained in Dixon at [92]:

The assumption of fact relied upon by the Claimants in the present case was made, they allege, when, in July 2015, the Claimants executed the extensions to their employment agreements, specifically surrendering the “Change of Control” provision which those contracts had previously contained, and consisted of a common assumption that, on the sale of Finansbank, they would each be entitled to receive a Fee under their respective IFAs allied with an assumption that NBG would not subsequently contend that no Fee was payable on any of the bases now relied upon in its Defence in these proceedings.

Mr Valentin submitted that, when the IFAs were originally executed, there was no prospect that NBG would sell its stake in Finansbank at less than book value because Finansbank was trading at significantly over book value. Mr Valentin relied, for these purposes, on Dr Aras’s evidence in his witness statement that “our discussions assumed that the Bank would be sold at substantially over book value”. He submitted that that remained the position in the Spring of 2015 when, according to Dr Aras, NBG’s senior management (including Mr Mylonas) expressed the view to him that NBG would not sell Finansbank at below book value. Furthermore, Mr Valentin suggested, in negotiating the extended employment contracts in July 2015, Mr Mylonas explained that, in the event of a sale, the Claimants would become entitled to an incentive fee under the IFA, so giving Dr Aras, in particular, confidence that he would be entitled to receive a fee, as there were no circumstances in which NBG would sell Finansbank at below book price. Mr Valentin submitted that the fact that “there are other possibilities in life that do not materialise at all”, as Mr Guzeloglu put it when giving his evidence, does not detract from the clarity of the evidence to the effect that NBG would never permit a sale to take place at below book price. Mr Valentin also highlighted Mr Mylonas’s evidence that, despite knowing that it was Dr Aras’s assumption that there would be dire consequences if NBG ever sold below book value, he never told the Claimants that NBG was going to sell Finansbank at below book value.

It was Mr Valentin’s submission that, in such circumstances, it would be unjust to allow NBG to go back on the common assumption (which it encouraged the Claimants to make when agreeing to their revised employment agreements) for a number of reasons: first, because, following discussions with NBG, the Claimants entered into their extended employment contracts, removing the “Change of Control” provision, on the basis of that assumption, thereby foregoing the substantial benefits that would have accrued to them had they been able to exercise their contractual rights following a sale and, secondly, because NBG shared the assumption, as demonstrated by its entry into the QNB Side Letter, which was only necessary if NBG believed that a Fee was payable. For these reasons, Mr Valentin submitted that NBG should be treated as being estopped from contending that no Fee is payable by advancing the interpretation of the IFAs which they put forward at the hearing.

This is not a submission which I can accept. I am quite clear, on the contrary, that the Claimants’ estoppel case is wholly unsustainable. Mr Parker submitted, and I agree, that it had simply not been established, on the evidence, that there was the common assumption alleged, namely that “there were no circumstances in which [NBG] would sell Finansbank at a price which was below its equity book value”. This is the case for several reasons. First, the alleged common assumption is inconsistent with the fact that the IFAs themselves plainly contemplated the possibility that Finansbank might be sold for less than its book value. As Mr Parker submitted, if Mr Valentin’s argument were right, then, it is difficult to see why the IFAs would have contained this wording in the Appendix:

Moreover, it is, at a minimum, doubtful that the matters relied upon by the Claimants apparently as demonstrating the alleged common assumption do so. One such matter was the statement said to have been made in conversations with Mr Mylonas and Mr Tourkolias, NBG’s Chief Executive Officer, earlier in 2015 that there would be “dire political consequences if NBG sold Finansbank for anything less than its book value”. In this respect, Mr Valentin pointed out in closing that Mr Mylonas himself accepted in his witness statement that “We all certainly made clear to Dr Aras that NBG wanted to sell Finansbank for as much as possible and that we would be seriously criticised if it were sold for less than book value”. Furthermore, it was Dr Aras’s evidence, which I accept, that, when Mr Fragiadakis replaced Mr Tourkolias as Chief Executive Officer, he made essentially the same point when he observed that “they will hang me in Syntagma Square if I sell Finansbank below book value”. Mr Valentin submitted that this establishes that such a sale (at less than book value) was never going to be allowed to happen. Mr Parker, on the other hand, submitted that the statement shows that such a sale is precisely what might happen since, if there had been no circumstances in which it might happen, it would be unnecessary to speculate as to what the consequences might be. Although I can see merit in both of these positions, it is nonetheless unnecessary to decide which of them I prefer given Dr Aras’s acceptance in cross-examination that, whilst NBG did not want to sell at below book value, it was nonetheless possible that NBG might have to do so. The relevant exchange on this issue was the following:

Nor was the evidence of the Claimants themselves as to the existence of the alleged common assumption exactly compelling. Thus, although Dr Aras referred to his being told prior to Spring 2015 that there would be “dire political consequences if NBG sold Finansbank for anything less than its book value”, in his witness statement his evidence as to what was said during the negotiation of the extension to the employment contracts was merely that “Mr Mylonas reasoned that, in the event of a sale, I would become entitled to an incentive fee under the IFA” with no suggestion that Mr Mylonas actually told him that there were no circumstances in which Finansbank would be sold for less than book value. In cross-examination, his evidence was no more compelling, as this passage demonstrates:

It is not strictly necessary, in these circumstances, to resolve the conflict in the evidence which I have previously mentioned concerning the meeting which took place in Turkey in December 2015. It was Mr Mylonas’s evidence that this meeting was on 17 December 2015 and that it involved him telling the Claimants about the sale to QNB which had been agreed and asking them to agree that NBG’s obligations under the IFAs should be assigned to QNB. According to Mr Mylonas, the Claimants’ response was to say that they would only agree if the condition which meant that a Fee was only payable if “A” in the Appendix to the IFAs was a value greater than one (1) was removed. On that basis, as far as Mr Mylonas was concerned, the Claimants understood that Finansbank might be sold for less than its book value. Although Mr Parker highlighted in closing how, when giving his evidence, Dr Aras first said that he did not recall whether Mr Mylonas had asked the Claimants in the meeting on 17 December 2015 to agree to an assignment and only then went on to state that it had not been discussed, I am not persuaded that this criticism is entirely fair, not least because Mr Mylonas himself accepted that he had not disclosed the sale price to Dr Aras at the meeting on 17 December 2015 because the price was confidential. Furthermore, Mr Mylonas went on to agree with Mr Valentin that neither at that meeting nor on any other occasion did he tell Dr Aras (and, implicitly, the other Claimants) that “we planned to sell at less than book value” or that “we were going to” do that. It is correct to say, as Mr Parker pointed out in closing, that Mr Mylonas went on to maintain that there was a discussion concerning the IFAs at the 17 December 2015 meeting and not later, on 22 December 2015, after the sale to QNB had been announced, as Dr Aras insisted, but that is not evidence which I can accept. I am clear, on the contrary, that Mr Mylonas must have been mistaken in what he had to say on this topic. I agree with Mr Valentin that, in the light of Mr Mylonas’s acceptance that he did not tell the Claimants the price which had been agreed with QNB, allied with his acceptance also that he did not tell the Claimants that the sale was at less than book value, it is distinctly unlikely that Dr Aras would have asked Mr Mylonas to remove the condition which meant that a Fee was only payable if “A” in the Appendix to the IFAs was a value greater than 1. There would, in short, in such circumstances, have been no reason for Dr Aras to have made such a request at the meeting on 17 December 2015. I, therefore, accept what Dr Aras had to say concerning that meeting and reject Mr Mylonas’s evidence concerning it, not because I consider that Mr Mylonas was knowingly giving false evidence but merely because, in my view, he has misremembered what happened at the meeting. I furthermore accept what Dr Aras went on to say concerning a telephone conversation which he had with Mr Mylonas on 22 December 2015, which was that Mr Mylonas called him to say that the sale to QNB had been agreed and that, as part of that sale, it had been agreed that QNB would pay the incentive fees to the Claimants.

The fact that I have accepted Dr Aras’s evidence on these matters does not, however, change my overall conclusion as to the common assumption which the Claimants have alleged and on which their estoppel by convention case is founded. This is because, even though Mr Mylonas did not tell the Claimants (whether at the meeting on 17 December 2015 or at any other time) that a sale would be at less than book value, the fact remains that the Claimants themselves recognised that this was a possibility, and that appreciation on the part of the Claimants means that there cannot have been the common assumption which has been suggested. I might add, in this regard, that I am not swayed from this conclusion by Mr Valentin’s reliance on the fact that the QNB Side Letter was entered into, something which Mr Valentin submitted was only necessary if NBG believed that a Fee was payable. I agree with Mr Parker that the QNB Side Letter is no evidence of the existence of any relevant common assumption and that the explanation for its being entered into is that NBG sensibly wanted to protect itself against any liability to the Claimants under the IFAs. As Mr Parker highlighted, the QNB Side Letter sets out the terms on which QNB had agreed to pay “an incentive Fee (the Fee) provided for in the incentive agreements” (Clause 1.2) rather than stating that a Fee had actually fallen due, or would fall due, for payment. Quite obviously, the agreement between NBG and QNB was that, if a Fee was to be payable under the IFAs, QNB would meet the liability. The QNB Side Letter is, therefore, essentially neutral; it certainly does not warrant a conclusion that there was the common assumption which is now alleged.

It makes no difference, in these circumstances, whether Mr Mylonas had by this stage (December 2015) reached any view as to whether a Fee was payable, which was what he maintained in his evidence, since all that matters is whether there was the alleged common assumption and I have concluded that there was not. It follows that, although Mr Valentin was dismissive of Mr Mylonas’s evidence that he had not personally formed any view on whether a Fee was going to have to be paid to the Claimants, ultimately it does not matter whether he did or not. Mr Valentin again in this regard relied upon the fact that NBG decided to enter into the QNB Side Letter as demonstrating that Mr Mylonas (and NBG) must have appreciated that a Fee was payable. I have dealt with that point already. Otherwise, Mr Valentin suggested that the calculation required to work out whether €2.75 billion was greater than the published book value of Finansbank, converted to Euros as at the TL-€ exchange rate applicable on 30 September 2015, could be performed in about thirty seconds. Whilst that may well be right, it does not, however, justify a conclusion that Mr Mylonas must necessarily have carried out that calculation, not least because it presupposes that Mr Mylonas’s thinking at the time was in alignment with how the Claimants put their case on the appropriate construction of the IFAs (and the Appendix) which, although I have accepted the Claimants’ submissions on that issue, is not how the case was presented before the Court by NBG, the bank for which Mr Mylonas works. The position is, I am satisfied, as Mr Mylonas explained it in the following exchange with Mr Valentin (as relied upon in closing by Mr Parker)

A further reason why I consider it appropriate not to accept Mr Valentin’s submissions concerning the alleged common assumption stems from the timing and manner in which the estoppel by convention case has come about, specifically the fact that it was not until earlier this year, when witness statements were exchanged, that the alleged common assumption was first mentioned. There was no mention of it in the Particulars of Claim as originally served in May 2017. Nor was there any mention of it in the Reply which was served in July 2017. Nor was there any mention of it in the Amended Particulars of Claim served in August 2017. Nor was there any mention of it in the Amended Reply served in September 2017. It was only in January 2018 that the point was raised in the witness statement which was made by Dr Aras. This was then followed by re-amendments to the Amended Reply in March 2018 in which the estoppel by convention case was put forward. As Mr Parker submitted, it is somewhat curious that it should take so long for the Claimants to advance a case based on a common assumption which they invite the Court to conclude they themselves held and which they shared, so it is alleged, with NBG. If the common assumption existed, the obvious thing for the Claimants to have done would have been to say so at a much earlier stage. Indeed, as Mr Parker pointed out, it should not be overlooked in this respect that these proceedings were prefaced by exchanges between the Claimants and NBG (or their respective lawyers) in which, although debate was had concerning how the formula in the Appendix to the IFAs should be approached, there was no mention of any prior understanding that a sale at less than book value was impossible. Again, had there really been the common assumption which was alleged at trial, then, this is a striking omission.

Since there was no sufficiently unambiguous and unequivocal common assumption of the type alleged by the Claimants, that is an end to their estoppel by convention case. Even if I had reached a different conclusion on that issue, however, I would have gone on to decide that, in any event, the estoppel by convention case could not succeed. This is because I agree with Mr Parker when he submitted that the Claimants did not, in any event, rely upon the suggested common assumption in agreeing an extension to their employment contracts and, furthermore, that, even if they did, it would not be unconscionable to permit NBG now to maintain that no Fee is payable. The important feature to appreciate in this regard is that the Claimants’ existing employment contracts were all due to expire on 31 December 2015. Once those contracts had expired, their right to receive (under Clauses 2 and 14(f)) an “Early Termination Payment” in the event of a “Change of Control” would also expire. If they had refused any extension to their existing contracts, they would all have expired long before the closing date under the SSPA and long before any “Change of Control” arose. Accordingly, in view of how matters turned out, they would have received no “Early Termination Payment” in any event and it follows that their existing “Change of Control” entitlements were worthless. Mr Guzeloglu accepted this, in terms, as he had to do given that what was being put to him by Mr Parker was plainly correct.

Furthermore, again as Mr Parker pointed out during the course of closing (as well as in cross-examination), in agreeing to an extension of their employment contracts, the Claimants received very substantial advantages since, not only did they secure their continued employment with Finansbank (something which, unsurprisingly given their long service, they were keen on doing) on very generous terms, but they also kept their rights under the IFAs. This, in circumstances also where Mr Mylonas only wanted initially to agree an extension of one year but was persuaded to grant a longer extension on the basis that the “Change of Control” provisions were removed. In these circumstances, I consider that there is considerable force in Mr Parker’s submission that, even if the Claimants did decide to extend their employment contracts in reliance on an assumption that a Fee would certainly be payable under the IFAs, it is difficult to see how it can really be the case that they thereby suffered detriment. Dr Aras, indeed, essentially accepted that this was the case during the following exchange in cross-examination with Mr Parker:

In addition, again as Mr Parker submitted, even if the Claimants had tried to insist upon the retention of the “Change of Control” provisions in their extended employment contracts, it seems most unlikely that NBG would, in any event, have gone along with this since (as Mr Valentin himself submitted) NBG would, no doubt, have wished to avoid a situation where the Claimants could all have served notice terminating their employment contracts with effect from 10 August 2016 (as they would have been entitled to do had the “Change of Control” provisions been maintained in line with what had previously been agreed), triggering entitlements to the salary and retention payments that would otherwise have fallen due for the remainder of those contracts, with the consequence that QNB, having only just bought Finansbank, would lose its three most senior executives. NBG would inevitably have been alert to the need to avoid this putting off potential purchasers such as QNB. For this reason, I am confident that, however much NBG would have been anxious to retain the Claimants’ services, NBG would not have agreed to the “Change of Control” provisions being retained, in any event.

It follows, for this and the other reasons which I have given, that the estoppel by convention case cannot succeed.

I can summarise my conclusions as follows:

The relevant “Exit Event” in this case was the execution of the SSPA on 21 December 2015. It follows that “the last Equity Book Value published in accordance with the BRSA standards before the Exit Event” (“D” in the Appendix to the IFAs) was that which was published on 30 September 2015, namely TL9,099,950,000: Issue (iv).

The correct approach in this case is to convert the “Equity Book Value” from Turkish Lira to Euros as at 30 September 2015: Issue (iii).

The Subordinated Debt ought not to be included in “C”, namely as part of “the value of the Company by reference to the Exit Value” for the purposes of performing the calculations required by the Appendix to the IFAs: Issue (i).

Nor ought the Finans Leasing element to be included in “C” for the purposes of performing the calculations required by the Appendix to the IFAs: Issue (ii).

The precise amounts which are due to each of the Claimants will need to be calculated taking into account what I have decided in relation to issues (i) and (ii). That calculation will need to be agreed in order that an appropriate order can be drawn up accordingly.

I am grateful to both Mr Valentin and Mr Parker, and to those instructing them, for the admirable manner in which the case was prepared and presented. This enabled a complex case to be dealt with as efficiently as possible.